A Case Study Of Yongtai Energy's Bond Cross Default

In recent years,with the continuous improvement of China's capital market financing function,the bond market has been vigorously developed,and the direct financing of issuing bonds has become one of the most important financing channels for enterprises.However,the leap-forward development of the bond market has also brought about some problems.Since the "11 Super Day Debt" officially declared a default in March 2014,the case of default of China's bonds has become higher and higher;in addition,with the widespread application of cross-default clauses in recent years,the issue in the bond market Debtors and investors have also had a huge impact.Although bonds with cross-default clauses can protect investors,triggering cross-default clauses may trigger a chain reaction,accelerate the break of the bond capital chain,and expand the scope of bond defaults.Therefore,the discussion of the root causes of cross-default of bonds issued by enterprises,and how to prevent and respond to bond defaults and cross-default risk are issues that we are facing and urgently need to solve.According to Wind data,among the entities that defaulted on bonds in 2018,Wintime Energy Co.,Ltd.had the largest default amount and the largest number of default bonds.The largest amount and amount of Wintime Energy Co.,Ltd.Bond defaults are mainly due to the role of "cross-default clauses".Therefore,this paper selects a certain representative Wintime Energy Co.,Ltd.as a case enterprise,combined with the design of its cross-default clause to explore and analyze the related issues of cross-default bonds.Based on the theory of information asymmetry,financial distress theory and other related theories,and the application of bond default model,this paper makes a comprehensive analysis of the default situation of China's bond market.Taking Wintime Energy Co.,Ltd.as an example,this paper focuses on the status quo,default process,causes,consequences and impacts of bond defaults in China's bond market.The analysis of the reasons for default is mainly from corporate finance,strategic management,macro environment,rating agencies and cross-default clauses.This paper analyzes the purpose of this study to provide recommendations for companies in the bond market in China to prevent cross-border defaults: companies should broaden their financing channels,focus on their own profitability and cash flow;avoid blind capacity expansion and establish diversified financing development.The concept is matched with the scale of the company's assets;attention to policy risks,vigilance against cross-default.In addition,investors and regulators are also advised.Investors should improve their risk identification capabilities,enhance post-investment tracking management,actively protect their rights and interests,and effectively use the creditors' resolution system;regulators should improve the rating agency supervision mechanism and information disclosure system.Strengthen the industry's environmental change early warning mechanism,maintain the independence of rating agencies,and enhance the credit rating credibility.Through the research on the case of cross-default of Wintime Energy Co.,Ltd.Bond,this paper hopes to provide some reference for Chinese enterprises to reduce and prevent bond default risk and cross-default risk.It also hopes to help the stable development of the bond market and alert them to issue bonds.Subjects,regulators,and investors pay attention to and prevent the risk of bond default.